- Americans are angry about rising fast food prices.
- Instead, some diners are turning to independent restaurants, casual dining chains and home-cooked meals.
- Some people would rather pay a few extra dollars to sit down and eat a meal with their family at Chili’s or Applebee’s.
As fast food prices continue to rise, Americans are looking for ways to get better deals.
Others are turning to local Latin restaurants or casual dining chains.
Some people are buying more groceries and cooking at home instead.
Like fast food prices, grocery prices have also risen during the pandemic, but while grocery prices are now nearly back to pre-pandemic levels, inflation at limited-service restaurants remains high.
Additionally, consumers are discovering the benefits of preparing healthy meals at home.
Chad Frye, a California cartoonist and illustrator, said he used to be a “fast food addict” who ate fast food four or five times a week, but has now cut back to about two meals a week.
“People cook at home a lot more now,” Fry says, “because it’s a lot more economical.”
Thomas Valentine, 32, from Arizona, said he usually buys prepackaged meals from the grocery store.
“The only cooking I do is roast some chicken thighs in the oven and make some instant potatoes or ramen noodles,” he said.
Eggs and chicken tenders are staples for Jordan Sanchez, 27, a California resident who works as a loader for a delivery company and says he’s been cooking more because of health concerns and the rising cost of fast food.
Meanwhile, a Lawrence Milford family is recreating the fast food favourite at home.
The 48-year-old financial planner from Florida with two children said his wife sometimes grills up McDonald’s-style burgers “to please the kids” and replicate the taste of eating out.
Grocery stores are fast food chains’ biggest rivals
Corporate executives are also starting to notice the shift to home cooking.
“Many customers are becoming more selective about where and how they spend their money,” the Starbucks CEO said. Laxman Narasimhan The company told investors on its last earnings call, adding that some customers are also saving money by eating more meals at home.
McDonald’s acknowledges this.
Bernstein restaurant analyst Danilo Gargiulo previously told BI that it all comes down to the “delta,” or gap, between food and restaurant inflation rates.
Ultimately, he says, fast-food chains’ biggest competitors aren’t rival restaurants but grocery stores, because people are trying to decide whether to eat at home or eat fast food. When fast-food prices rise faster than grocery prices, consumers notice.
Some grocers are seeing the effects of changing customer habits: Walmart U.S. CEO John Furner said at the Oppenheimer conference this week that consumers are starting to buy more ingredients for home cooking, including fresh produce, protein and dairy.
RJ Hottovy, head of analytics and research at Placer.ai, an analytics firm that tracks attendance, told BI that there has been a shift in attendance numbers. In recent weeks, consumers have been shifting away from fast food chains toward full-service restaurants and discount grocery stores, a trend he attributes to price increases at the fast food chains.
Diners are turning to Chili’s, Applebee’s and Mexican restaurants
People are not only changing how they cook but also where they eat to save money.
Some consumers told BI they are choosing casual dining chains, independent restaurants and neighborhood Mexican or Latino spots because they enjoy higher quality meals and the ability to sit down and enjoy meals with their families.
“You can get really good food for about the same price as a sit-down meal,” Frye said.
Family-friendly casual dining chains like Applebee’s and Chili’s typically offer extensive menus and entrees under $15. For many diners, it’s the value proposition that’s key.
Martin Jennings, a 51-year-old truck driver from Florida, and his wife try to go to sit-down restaurants like Chili’s or TGI Fridays when they go out to eat with their kids. [getting] Get a burger at the drive-thru.”
“And it’s only a few dollars more. Honestly, it feels like the only thing we pay extra for these days is the tip,” Jennings said.
Some people are turning to privately owned restaurants for similar reasons.
Brooks Ferrante, a 32-year-old construction worker in Florida, said he has largely ditched McDonald’s and Wendy’s for fast-casual chains like Chipotle and local restaurants that serve Cuban and Puerto Rican food. He typically spends $10 or $11 on a meal, including tip.
Ben Heyworth, a customer care executive from Florida, has made similar changes to his eating habits.
He told BI that a Mexican restaurant near his home sells better quality food than fast food chains, charging $10 to $15 for an entree and drink.
“I feel like I’m getting better value,” he said. “I can sit down and eat, it’s a better atmosphere, the service is better, the food is better and there’s more options.”
